Binance, facing billion-dollar fines and the resignation of its CEO, Changpeng Zhao, due to criminal charges in the United States, is in the spotlight in the world of cryptocurrencies. As the world’s largest cryptocurrency exchange experiences legal turmoil, its US rival Coinbase is seeing this as an opportunity to bolster its compliance stance.
Coinbase CEO Brian Armstrong highlighted his company’s commitment to compliance since its founding in 2012. He stated: “We secured the licenses, hired the legal and compliance teams, and made it clear that our brand was a matter of trust with our customers and compliance with the rules”.
Since the founding of Coinbase back in 2012 we have taken a long-term view. I knew we needed to embrace compliance to become a generational company that stood the test of time. We got the licenses, hired the compliance and legal teams, and made it clear our brand was about trust…
— Brian Armstrong 🛡️ (@brian_armstrong) November 21, 2023
Changpeng Zhao, also known as “CZ,” agreed to step down from his position as part of a plea deal with the U.S. Department of Justice, admitting guilt to money laundering violations and agreeing to pay a $50 million fine. Additionally, Binance will have to pay a $1.8 billion fine and comply with a $2.5 billion confiscation order.
Armstrong highlighted that taking the compliance path is not easy, but it is the right decision. He highlighted: “It is more difficult and expensive to adopt a compliant approach. You can’t launch all the products customers want when they are illegal.”
However, Coinbase also faces regulatory challenges in the United States. The company is at odds with the Securities and Exchange Commission (SEC) for allegedly operating as an unregistered broker-dealer and exchange. Coinbase, which generates most of its revenue in the US, is exploring alternative markets to address growing regulatory challenges in the country.
Coinbase Chief Legal Officer Paul Grewal seized on the Binance news to criticize the US regulatory approach to crypto. He stated: “U.S. regulation through an enforcement-only approach has only increased consumer risk and driven customers and innovation out of the country.”
The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing in or trading cryptocurrencies carries a risk of financial loss.